Knorr-Bremse AG

Good afternoon, ladies and gentlemen, and welcome to the Knoll-Brenzer AP Quarter 1, 2015. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Today's representatives are CEO Mark Listerseyer and CFO Frank Weber. Let me now hand the floor over to the Head of Investor Relations, Andreas Spitzhauer.

Thank you, Operator. Good afternoon, as well as good morning, ladies and gentlemen. My name is Andreas Wittsbaum, Head of Investor Relations of Knorr Bremse AG. I want to welcome you to Knorr Bremse's conference call for the first quarter results of 2023. Today, Mark Lister-Zeyer, our CEO, and Frank Weber, our CFO, will present the results of Knorr Bremse, followed by a Q&A session. The conference call will be recorded and is available on our homepage, www.knorr-bremse.com, in the Investor Relations section. Here you can find today's presentation and later transcript of the call. It is now my pleasure to hand over to Marcus to say a few words.

Thanks, Andreas, and welcome everybody to our quarter one 2023 earnings call. We appreciate you joining us today as we have to tell you something. Let's kick in off with today's key takeaways on chart number two. An ongoing tough economic environment, especially due to the inflationary headwinds, Florida 1 developed as expected. Revenues increased significantly, while EBIT margin was under pressure. We told you during our financial year results that from a financial point of view, 2023 will be the margin. We are fully on track with our full year 2023 guidance, which we confirmed yesterday. All in all, the Marlin rail and truck is holding up nicely, which underlines the robustness of our business and the activity of our embargoes. One of our current strategic priorities is to optimize the strength of our portfolio. We have already made good progress in recent weeks and months. We signed the sale of a foundry from our steering operations in the US, and the keeper sale is doing good progress as well. I will provide you more details on portfolio optimization and cost reduction opportunities during this strategy update on July 18th this year. In addition, at this virtual event, I will share our ideas for the future direction of small businesses. Let's move to chart number three. Especially in Europe and North America, underlying demand in the rail market remains strong, driven by governmental support and the remittance pushed towards green mobility, where the most eco-friendly mass mobility solutions are, and of the future, especially of the future. The elevated order books of our OEM customers in the translation into RBS backlogs are a clear proof of this. The market in China seems to be slowly but steadily recovering from two very weak years that were driven by economic challenges and the zero-COVID policy. The end of this policy is positive for all of us, and the increased ridership is already showing a positive effect on our aftermarket business. After the year OA, strides will take some time to improve again. At the moment, the biggest concern in the rail segment still is behind inflation. As highlighted before, splicing in long-lasting OE contracts can hardly be adjusted. Aftermarket is easier, but we also have our important long-lasting relationships with the operators in mind. We do not want to risk them simply because of some positive short-term financial benefits. The truck market also faces ongoing good demand in Europe and North America. Truck production rates significantly increased in both regions in the past quarter and are also expected to be at least stable or grow slightly on a full-year level. Overall, in terms of demand, we expect The first half year is to be stronger than the second half year this year. Stock production rates in China in quarter one recovered significantly as expected. We have benefited from this recovery due to our leading market position and leading position in field of technology, as well as our successful restructuring activity. In addition, there are good opportunities regarding contemporary ego. driven by the rather lower safety standards and the move towards innovative and reliable technologies also in China. Inflationary headwinds are also an ongoing challenge for the truck industry. We're confident to finalize the ongoing pricing discussion, so-called Wave 2, with good results. It should enable us to achieve a positive price-cost ratio this year for trucks. I would like now to hand over to Frank for the financial insights.